Move will bring relief to worried tech firms
HSBC has announced that it has acquired the UK arm of collapsed US Silicon Valley Bank (SVB), in a move that will reassure UK tech firms who warned that could go bust without support.
Silicon Valley Bank - which specialised in lending to technology companies - was shut down by US regulators on Friday, in what was described as the largest failure of a US bank since 2008.
The shock of its collapse reverberated across the tech industry over the possible impact it could have on businesses.
HSBC’s acquisition of SVB UK made “excellent strategic sense” for its UK business, according to HSBC Group CEO, Noel Quinn.
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“It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally,” Quinn commented.
“We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC.”
Quinn added: “We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.”
HSBC shared that SVB UK had loans of around £5.5bn and deposits of around £6.7bn. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88m and its tangible equity was expected to be around £1.4bn.
Final calculation of the gain arising from the acquisition would be be provided in due course, HSBC said. The assets and liabilities of the parent companies of SVB UK were excluded from the transaction.
The transaction would complete immediately, HSBC said, adding that it would update shareholders on the acquisition at its 1Q 2023 results on 2 May 2023.
